The upward revisions to consumption mean that household spending has more momentum than previously thought and raise the risk that households will spend most of the income tax cuts due on 1st July. However, the revisions also mean that the household savings rate is lower than earlier reported. We suspect that households will use most of the income windfall to restore their savings buffers and only expect a major acceleration in consumption growth next year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services